For The Standardx franchise, how often does the Guarantor Monetary Threshold increase?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
The Guarantor Monetary Threshold will increase automatically each year of the Franchise Agreement's term, without notice from us, effective on the first day of the calendar month during which the Franchise Agreement's effective date falls, by an amount equal to the CPI Increase.
The "CPI Increase" means the amount to be adjusted multiplied by a fraction, the numerator of which is the Consumer Price Index for All Urban Consumers for All Items, which the U.S. Department of Labor, Bureau of Labor Statistics publishes (the "Base Index") as of the first day of the calendar month during which the increase is to take effect, and the denominator of which is the Base Index in effect on the Franchise Agreement's effective date or used for the most recent increase (whichever is later).
If the Base Index is no longer published, we may designate another reasonably comparable index for calculating changes in the cost of living or purchasing power for consumers.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 71–74)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the Guarantor Monetary Threshold will increase automatically each year of the Franchise Agreement's term. This increase takes effect on the first day of the calendar month during which the Franchise Agreement's effective date falls. The increase is based on the CPI Increase, which is calculated using the Consumer Price Index for All Urban Consumers for All Items published by the U.S. Department of Labor, Bureau of Labor Statistics.
For a prospective The Standardx franchisee, this means that the financial requirements for the guarantor of the franchise agreement will rise annually. This is designed to account for inflation and changes in the cost of living, ensuring that the guarantor's financial capacity keeps pace with economic conditions. The initial Guarantor Monetary Threshold is listed in Exhibit B-1 to the Franchise Agreement, which the franchisee will see before signing.
The CPI Increase is determined by comparing the Base Index (Consumer Price Index) on the first day of the calendar month of the increase to the Base Index in effect on the Franchise Agreement's effective date or the date of the most recent increase, whichever is later. If the Base Index is no longer published, The Standardx has the right to designate another reasonably comparable index for calculating changes in the cost of living or purchasing power for consumers. Franchisees should be aware of this automatic annual increase and ensure that their guarantors are prepared to meet the rising threshold to remain in compliance with the Franchise Agreement.